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In Depth

Nation States' Espionage and Counterespionage

An overview of the 2007 Global Economic Espionage Landscape

By Christopher Burgess

Page 11

In September 2007, in response to the revelations of the June 2007 successful PLA attack on the U.S. Department of Defense, including the defense secretary's office, the Chinese Foreign Ministry rejected the accusations, labeling them "groundless." Foreign Ministry spokesman Jiang Yu noted, "The Chinese government has always opposed any Internet-wrecking crime, including hacking, and cracked down on it according to the law."

Also in September 2007, Lou Qinjian, vice minister of Information Industry, claimed that China was the victim, not the aggressor, and suggested that China had sustained more cyber-espionage than western nations, to include "massive" and "shocking losses of state secrets via the Internet."

In mid-November 2007, an annual report from the U.S.-China Economic Security Review Commission found that China poses a significant espionage threat to the U.S. and U.S. industries, resulting in a plethora of denials from China. The Chinese Foreign Ministry stated, "Concerning the issue of the so-called Chinese economic espionage in the United States, we have many times solemnly stated that China has never endangered the interests of another nation. We stand on the principle of mutual benefit based on fairness, justice and equality in undertaking cooperation in every area with other nations."

In late November 2007, Chinese Premier Wen Jiabao, speaking to the attendees of the China-EU Business Summit, said, "Protecting the intellectual property rights is not only necessitated by China's opening up, but also by a domestic drive for encouraging innovation and scientific development." It is worthy of approbation to note that since 1985, when the first patent law was created through today, China has put in place a comprehensive intellectual property rights legal framework. And there is no denying that the level of enforcement has increased year over year since 1985, but whether or not it is at appropriate levels is dependent upon one's perspective. Suffice it to say, there is ample room for continued improvement.

U.S. intellectual property under siege

The U.S. Defense Security Service, the entity with the counterintelligence oversight for corporate America's engagement with the Department of Defense, said in its most recent counterintelligence study that more than 100 countries were active in and engaged in attempts to acquire intellectual property from U.S. entities.

In mid-November 2007, the U.S. Department of Justice (DOJ) compiled and released a fact sheet ("Major U.S. Export Enforcement Actions in the Past Year") that summarized the 33 major cases (October 2006-October 2007) and prosecutions of illegal export of U.S. technologies (including those acquired through espionage activities) during the previous year. Interestingly, the number of countries identified totaled 10, with Iran and China each responsible for approximately a third of the cases. Equally interesting is how none of the cases involving Iran were characterized as espionage. Of the four cases identified as "espionage," all four cases identified China as the nation-state sponsor. Remarkably, Russia is conspicuous in its absence.